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<h2 id="header-0">On December 15, the US Federal Reserve (Fed) announced a 50 basis point increase in interest rates. Following the announcement, the price of leading cryptocurrencies surges briefly before plummeting.</h2><p>After four straight 75 basis point hikes, the Fed eased its monetary tightening stance in the year&#39;s last FOMC meeting. With the 50 basis point increase, the Fed&#39;s interest rate now stands at 4.5%.</p><p>Meanwhile, the broader market also anticipated a 50 basis point increase following the release of lower-than-expected year-on-year Consumer Price Index (CPI) rates. On December 13, the <a href="https://www.coingabbar.com/en/crypto-currency-news/us-cpi-inflation-drops-71-percent-bitcoin-ethereum-rises" rel="noopener noreferrer nofollow">CPI was announced as 7.1%</a>, which was lower than the projected CPI of 7.3%.</p><h3 id="effects-of-50bps-hike-on-crypto-prices">Effects of 50bps hike on Crypto prices</h3><p>The increase in interest rates had a detrimental effect on the cryptocurrency market, with Bitcoin and Ethereum both falling by about 3.3% and almost 4%, respectively. The crypto trading community believes that investors purchased the rumor of the 50 basis point increase and sold the news.</p><p>As per reports, over $17 million in trades were liquidated from crypto exchanges in one hour following the announcement of a 50 basis point interest rate hike. The <a href="https://www.coingabbar.com/en/crypto-blogs-details/what-motivates-firms-and-investors-to-invest-in-a-bear-market" rel="noopener noreferrer nofollow">crypto traders</a> who had gambled funds on the bullish market trend experienced massive losses. Among all trades, 93.25% of longs worth $15.91 million were liquidated.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/16a642dff5654e7485e5d8d3e699385d.png" /></p><h4>Will a 50bps hike signal a shift in the Fed&#39;s stance?</h4><p>From March 2022, when Fed raises interest rates by 25bps, the Federal Reserve has started the cycle of increasing interest rates. After that, the Fed never altered its stance on relaxing monetary policies until today, when the Fed lowered its interest rate hikes by 25 basis points.</p><p>Experts believe that this clearly indicates that the Fed will now change its stance and will reduce interest rates further in future FOMC meetings. This also indicates that the likelihood of a global recession is probably zero.</p><p>Meanwhile, Fed Chairman Jerome Powell&#39;s speech indicates that the Fed would maintain its existing stance of not easing monetary policies and will increase interest rates again in 2023.</p><p>In response to Powell&#39;s speech, the global trading community believes the Fed is trying to drive the US economy into a deep recession. However, some believe that raising interest rates is the only option left to strengthen the US economy.</p><p><strong>What do you think, will the Fed reduce interest rates further in its upcoming future meetings, or will it again raise interest rates by 75bps to 100bps? Share your thoughts in the comment section below.</strong></p><p><strong>Read also: <a href="https://www.coingabbar.com/en/crypto-currency-news/xrp-reclaims-6th-place-411-million-xrp-moving" rel="noopener noreferrer nofollow">XRP Reclaims 6th Place with 411 Million XRP Moving</a></strong></p>

Fed Raises Interest Rates Yet Again

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